Outsourcing Times

Pros & Cons of confined facilities at offshore

-- By Priya Venkatesh, Staff Writer

Do you know the vantages of commencing confined facilities at offshore? How does that differ from subcontracting? Read on to know these interesting details.

The pros of such confined facilities at offshore are:

• Monetary transactions of the employer can be restricted to one bank account.
• Time zones can be taken advantage of by serving local clients during the daytime and western clients during the night.
• Keeping a handful of American managers at offshore, promoting local managers & aiming at quality products can circumvent Security/privacy issues.
• Work environment at the confined facilities are way better than work environment in subcontracting firms.

Looking into the cons of the confined facilities at offshore, one is able to see the tax liabilities, which has become a matter of deep concern. ]

• With the tax rates steeply rising, employers are forced to have second thoughts regarding the commencement of confined facilities at offshore particularly in India.

Click here to read one of our previous post on 'Is Outsourcing good or evil?'

Bristle side of Outsourcing

Do you happen to work with a co-worker who is a foreigner? Have you noticed the ethnic differences between yourself and your neighbor/co-worker who is a foreigner? Are you afraid of privacy/security issues that could come up as a result of outsourcing?

On a close observation of the current IT market trend towards outsourcing, you can very well understand the vast conflicts that are a part and parcel of the outsourcing wave of today's market.

When you are not comfortable with a co-worker who is a foreigner and a neighbor who does not match your wavelength in terms of ethnics, conversing medium and behavioral practices, its hard to digest the fact that Outsourcing, which is highly beneficial from several perspectives, is indeed the abode of working people with unimaginable ethnic differences and behavioral practices. Security is definitely one of the concerns in Outsourcing.

Cross-cultural training and proper selection of the company where the work is going to be given are some of the factors to be considered before outsourcing happens in any organization.

Click here to read my previous post on the measures taken by Indian firm to avoid security breaches, which are a part and parcel of the wave of outsourcing.

Incursion of ITeS into China

Are you into software development and debugging? Do you really know what is the latest trend in the IT industry? Read on to know the futuristic trail of IT enabled Services across the globe!

The Indian software giant, Infosys is setting up two new development centers in China. Crmbuyer articulates that ITeS growth could account to around $65 million involving around 6000 engineers in a span of 5 years from now.

Cheap labor is one of the main factors that drives this incursion of IT enabled Services into China. Driving IT work into China would help the employer to belt along the hectic software delivery docket accompanied by accurate deadlines and labor accountability.

Click here to read my previous blog on the penetration of outsourced work into Philippines.

Philippines join the Outsourcing race

As an onlooker of the current outsourcing scenario, you must be aware of the fact that India, China and Malaysia are the most popular subcontracting destinations. But of late, you are seldom surprised to hear that Philippine has also joined the race. Crmbuyer.com reports that the outsourcing initiative has become a $3 billion industry.

As a beholder, you are aware of the recent reports from newsmagazines describing the unimaginable technical expertise in web design, software development and graphics among the youth of Philippines. The clarity in communication, the fluency in English that Filipinos have added feathers to the cap.

The law enforcement in Philippines is on par with US. The ease with which software application development happens at a much lower labor add fuel to this fire of Outsourcing to Philippines.

Click here to read in detail about the growth of subcontracting work to Philippines.

Outsourcing your insurance

Do not be surprised if your insurer is looking to outsource services to a third party to improve operational efficiency and enhance growth opportunities. According to a report by Dublin-based consultants Research and Markets (R&M), outsourcing among insurance companies is a growing trend.

R&M based its conclusions on interviews conducted with insurers from the American continent, the Asia Pacific region, and EMEA. More than 50% of the interviews use BPO-based insurers.

The bulletin released by R&M, and quoted by Insurance Journal, goes on to say:

The horizontal processes such as HRO, F&A and CRM continue to grow significantly despite their dominance in terms of absolute usage. However, the fastest growth going forward will be in the industry specific processes such as claims processing and policy administration.

Swaziland government urged to outsource advertisement campaigns

The Swaziland International Trade Fair (SITF) is a mega event for the country. However, a meeting of exhibitors recently highlighted the need to advertise and market the event through outsourcing.

According to event coordinators, the business aspect of the fair needs to be emphasized, and this can be done by outsourcing the marketing of the event to subject matter experts.
According to the Swazi Observer, proper advertising can shift the focus of the trade fair from soccer and fun games to more serious business opportunities for the exhibitors.

Future of Outsourcing

Outsourcing is expanding its reach in terms if industry and geography. Companies that invest in outsourcing are growing in large numbers. Their individual needs are all similar. They just need to reduce overheads as much as possible. Outsourcing in automotive, energy, healthcare, technology and financial services markets is gaining momentum. Outsourcing brings multiple benefits to the firms. It enhances speed and efficiency. Outsourcing experience also enables the companies to gain expertise in new geographic areas into which they wish to expand. If the current trend will continue, outsourcing industry will have a great future.

Read my previous post titled "Offshoring Risks" to know more about risks associated with outsourcing.

Outsourcing of Professional Blogging

Recently, I have gone through an article by Wayne Hurlbert that highlighted the benefits of professional blogging. Professional blogging has a bright future. It is usually done by a paid writer. Most companies depend on blogs to increase their revenue and make their presence felt on the global arena. However, blog owners may not have the required knowledge, research skills or expertise to write blogs on a regular basis. Hence, they prefer to hire freelance writers or bloggers to do the work on a lesser pay.

Freelancers who stay at different locations do such work for a meager amount as compared to the revenue generated by the companies from these blogs. Business blogs have become more common on the blogging sphere. A business blog increases company revenue over time through marketing and relationship building. Even the task of blog writing is challenging for writers. In today's competitive market, only attractive and informative blogs can make the cut. Therefore, companies are outsourcing the entire blog writing operation to experienced freelance writers or bloggers.

Read our previous post titled "Growth in Contact Center Outsourcing Market" to know more about outsourcing market.

Outsourcing: Immature past, future perfect?

Outsourcing has almost become a compulsion in every industry. The premise on which outsourcing functions is that it reduces overhead costs and eases the pressure on in-house resources.

However, the experience of outsourcing business processes has not always been a positive one for enterprises. In an effort to reduce overhead costs, companies have been forced to sacrifice quality of service, and sometimes even lost out on customers in the process.

Market analysis firm Datamonitor reports that sales force outsourcing is most common in the pharmaceutical industry, while the concept of BestShoring—a strategy that tailors specific customer care needs to locations that are best suited for these functions—is picking up momentum.

Outsourcing is a constantly evolving process, and the lessons of the past guard against a repetition of the same mistakes in the future. As TMCnet reports:

Outsourcing can offer the company significant benefits in many areas, but the entire picture must be examined and understood before a move toward outsourcing can take place.

The US Gained From Outsourcing

There has been much hue and cry in the United States over the issue of outsourcing. Many people continue to oppose outsourcing saying that it would hurt the domestic workforce. However, according to the head of the US Chamber of Commerce, the United States has prospered by outsourcing its jobs to offshore destinations like India, China and Philippines.

Refer to my previous post titled "Is the Future of BPO Industry Secure in India?", which focuses on the future of BPO industry in India.

Economists in the country believe that the US cannot withdraw from the market and close operations just to protect its workers. The advantages of outsourcing should not be undermined at any cost. The statistics of the Federal Reserve Bank of San Fransisco revealed that out of every dollar of costs the US moves offshore, a net benefit of USD 1.12 to USD 1.14 are brought back.